How Open Source Companies get profit


It is very much true, open source technologies are widely acquired by many companies and individuals, you can get it everywhere; in your phone, your laptop, tablet and in most of the websites. Many companies develop open source free software applications, plugins many other things for business, but how do they get profit from their free products?
 
Usually, Red Hat, a global leader of open source software solution generates revenue more than $1-2 billion by offering free products. They packages and delivers Red Hat Enterprise Linux (open source operating system) to enterprises with 10 years of support facilities, their engineers track each and every changes comes in their product (Linux), like; bugs, security issues, enhancement, etc… and give surety to their customers and enterprises that the product is up-to-date and stable. Although, open source project “Linux” keep on changes always, like this Red Hat and other companies get profit.
 
So like Red Hat, there are many legal open source companies provide many free software and services without opening your wallet, but the biggest question comes; do these companies get profit like Red Hat? If yes, then how they get and from where they get profit.
 
Through this article, I have tried to explain you what exactly happens and how open source companies get profit.

How Open Source Companies get profit

We like in a world where money matters, than how come companies think of open source (Free)? Open source companies are not fool, they earn very good money, let’s see how,

Dual-Licensing products

There are many open source companies offer dual-license on their products; one free license and another enterprise license. Free license product will be having less features then enterprise license. Most of the companies do this for their products publicity; free one is to test the product and if users like the product they can purchase it with more features (enterprise license). Their enterprise license prices are not so high, they keep the average price so that everybody can purchase it and sometime price depends on the product quality.

Paid Support services

There are many free software in the market that are free to download and install, but difficult to understand. Some people doesn’t know how to download, install or use the product, they required some expert knowledge to Set-up their product.
 
Many open source companies provide their own support service to their customers, some companies support services are free and some companies provide paid services, or sometime it depends on product (commercial software).

High competition in the market place

Although, there are many open source companies in the market, that’s why competition is very tough. Only being in market is not enough, companies have to try hard to get some position/place in the market. Due to this reason, many companies provide many good open source or free products/services to increase their customers and business. Increasing number of customers increases business and place you in top in the market. Only company brand name works for product popularity and sell.

Crowdfunding

Crowdfunding, a procedure by which products are maintained via helps made in exchange for rewards on sites like Kickstarter, Indiegogo and Bountysource. Recently, an open-hardware laptop project elevated more than $700,000 on CrowdSupply, shattering its goal of $250,000.

Paid Plugins

Although, many open source software are free, sell them by adding plugins to them with many additional features (values), for example; the open source WordPress which is very popular now these days, provides “themes” or visual layouts effect. Some themes are free, but for some themes companies charge very high, such as WooThemes and AppThemes sell highly-polished themes for WordPress.

Conclusion

As you can see above, the hidden secret of open source companies, nothing is free in this world; everything costs in direct or indirect way. Some companies directly cost for their products, but some not with the product with plugins and services that give extra value to the particular product. Genuinely, it is very much true; if things will be free then how profile will come, how open source companies will pay to their employees and how without m

Other Interesting Posts

Advertisements